The start of a new year is a great time to review what happened over the last 12 months and take some lessons from it.
So, as 2025 gets underway, let's take a quick look back to see the highlights and lowlights from 2024 -- and what could be in store for the year ahead.
Image source: Getty Images.
The best of the best
Without a doubt, one of the biggest investing themes of 2024 was artificial intelligence (AI) stocks.
Nvidia (NVDA -0.02%), the king of AI stocks, battled Apple in a struggle to claim the title of the world's largest public company by market cap. As of this writing, Nvidia has once again surpassed the iPhone maker to claim the top spot, albeit by the narrowest of margins.
However, 2024 saw many other AI stocks surge, too. Palantir Technologies' stock soared by a remarkable 341%; SoundHound AI's stock advanced an eye-popping 836%.
It wasn't just the pure-play AI stocks that benefited last year. Overall, it was a big year for big tech.
Meta Platforms, Amazon (AMZN 0.01%), Alphabet, and Apple all outperformed the S&P 500 in 2024. Only Microsoft lagged the benchmark index.
META Total Return Level data by YCharts
In short, thanks to the continued unfolding of the AI boom, technology was a great place to invest in 2024.
The worst of the worst
If there was one sector that just didn't work for investors in 2024, it was budget retailers/convenience pharmacies.
Walgreens Boots Alliance, Dollar Tree, Dollar General, and CVS Health were among the worst-performing stocks in 2024. Each of them declined by at least 40% for the year, with Walgreens losing more than 60% of its value.
WBA Total Return Level data by YCharts
The effects of inflation took a toll on all of these companies as consumers cut back on purchases. As for the pharmacy retailers, falling reimbursement rates for drugs, increased theft, and rising competition sent shares tumbling.
Running a close second to the budget retailers were certain healthcare stocks. In particular, Moderna and Biogen. Moderna suffered a prolonged hangover as demand for COVID-19 vaccines fell. Shares of the vaccine maker tumbled by more than 57%. Biogen, on the other hand, has various problems that contributed to its 41% sell-off. Sales of its key Alzheimer's drug have slowed, and there are concerns that the company's drug pipeline is weak, meaning future revenue could come under pressure.
To sum up, discount retailers, convenience pharmacies, and certain drugmakers were the big losers in 2024.
What I'm excited to buy (and hold forever) in 2025
As has been the case for many years, I currently prefer growth stocks to value stocks. In particular, the tech sector remains a favorite of mine.
However, surveying the tech landscape at the start of 2025, three stocks stand out as companies that I want to buy and hold forever:
- Nvidia
- Amazon
- Tesla (TSLA 0.15%)
Nvidia makes the cut because it remains the primary beneficiary of the AI boom. While Nvidia's competitive advantage will eventually fade, there are no signs of it happening anytime soon. The company still designs the best AI chips, and demand for its products remains red-hot. In turn, the company is growing revenue and profits at a breakneck pace. In short, it remains all systems go for Nvidia as 2025 gets under way.
As for Amazon, I'm a longtime believer (and shareholder) in the company. As I've noted before, Amazon is best viewed as a conglomerate rather than simply an e-commerce company. Amazon Web Services (AWS) now generates over $100 billion in revenue per year, making it a giant in its own right if it were ever spun off into its own company. As for e-commerce, Amazon is growing its profitability through innovations like robotics, which drive down costs and shorten delivery times to consumers.
Finally, there's Tesla. Similar to Amazon, I believe investors need to adjust how they think of Tesla. True, automotive sales still make up a huge share of the company's revenue, but, increasingly, Tesla is becoming a robotics company. As its autonomous driving software (FSD) improves, Tesla's true value could be unlocked, as the company expands into ride-sharing, autonomous deliveries, and futuristic applications we haven't even considered. That's to say nothing of the company's Optimus robot, which could provide another revenue stream. To sum up, Tesla's future still looks bright as we step into 2025 -- making it one of my top choices as a stock to buy and hold forever.
